Plaintiff's contract with his builder
required the builder to purchase liability insurance and plaintiff to purchase
liability and property protection for the house during construction. Plaintiff
and Pittman met again in person in August 2003 to finalize insurance coverage
for the new house before the construction began.

It is undisputed that, during that
meeting, Pittman orally bound coverage, effective September 1, 2003, for the
house that plaintiff planned to build. The coverage was to remain in effect
during construction and would protect the construction up to the full value of
the house. Construction began on September 10, 2003.

Although Pittman orally bound
coverage effective September 1, 2003, plaintiff did not receive written
documentation of his coverage for the new construction until March 2004, when
he received a declaration page showing that coverage for a dwelling under
construction had been added to his existing AgriPlus policy. Plaintiff was
confused, as he had been expecting a new separate policy for the course of
construction coverage. Pittman told plaintiff that the declaration page was a
modification of his existing policy and provided the coverage for the new
construction that Pittman and plaintiff had previously discussed.

In the meantime, in January 2004, the
area suffered a severe snow and ice storm. The house under construction was
framed but not enclosed, and snow and ice built up inside of it, causing the
interior sheathing to split, the accumulation of water in the crawl space, and
a large amount of mold. Plaintiff notified defendant of the damage. He sued
the builder for faulty workmanship and obtained a judgment in the amount of
$364,101.49; however, because the builder was insolvent, plaintiff was unable
to collect on that judgment.

Plaintiff filed a claim under the
policy. Defendant denied coverage, on the grounds that there had been no
"direct physical loss," as required by the policy, and that the
policy excluded coverage for plaintiff's loss, which had been caused by faulty
work, water, and mold.

Plaintiff filed this breach of
contract action against Pittman and defendant to enforce the terms of the oral
binder. Pittman prevailed on a motion for summary judgment and was dismissed
from the case. In plaintiff's second amended complaint, he alleged that
defendant breached the oral binder by (1) failing to put in place the insurance
bound by Pittman; (2) failing to provide coverage pursuant to Pittman's oral
binder; and (3) failing to mail or otherwise deliver a copy of the policy to
plaintiff within a reasonable period of time after its issuance, in violation
of ORS 742.043(2) and ORS 742.046. Plaintiff also sought attorney fees under
ORS 742.061.

Plaintiff's claim against defendant
went to trial. Plaintiff testified that he went to Pittman to discuss all of
his insurance needs and that, with respect to the new house, he was interested
in and asked for "course of construction" coverage, although he did
not know specifically what that was. He had told Pittman that he wanted
insurance that would provide a "safety net" or "catch
basin" of coverage, "in all instances that something goes wrong
during construction." According to plaintiff, he and Pittman did not
"go through the bullet points of a policy discussion," but he told
Pittman that the policy he was seeking would cover

"anything that goes through the cracks, that means the
guy doesn't pay a subcontractor, there is faulty work involved, somebody is
injured * * *, the tools are stolen, anything for which I might be deemed to be
liable in some form or fashion and anything that the contractor's coverage did
not specify or provide benefit for."

Plaintiff testified that, although he did not recall
specifically asking for protection for the builder's failure to perform, he
believed that Pittman understood that he was seeking such coverage and agreed
that defendant could provide it. According to plaintiff, Pittman did not
advise him of any exclusions from coverage.

Pittman testified that, in his
meetings with plaintiff, they discussed multiple insurance issues. Pittman
explained that the "course of construction" coverage sold to
plaintiff was added to plaintiff's existing policy, that it was an upgraded,
"all risk" type of property insurance that did not depend on fault,
and that it covered property damage caused by accidents, except for excluded
perils. Pittman remembered talking with plaintiff about the concept of fault
and primary and secondary liability in the context of liability coverage. He
testified that he never understood plaintiff to request coverage for faulty
work of the builder and that that is not a type of coverage that defendant
provides.

Plaintiff's insurance expert,
Underdown, testified that "course of construction" insurance is a
type of property and casualty (i.e., liability) insurance that people
purchase to cover a building during construction. According to Underdown,
"direct physical loss" is typically a prerequisite to coverage in a
course of construction policy, and insurers generally will not waive that
requirement. He also testified that a typical course of construction policy
includes exclusions for faulty work, mold, and water, but that it is possible
to "buy back" coverage for mold.

At the close of the evidence,
defendant moved for a directed verdict pursuant to ORCP 60, asserting that
plaintiff had failed to establish that Pittman's oral binder provided coverage
for plaintiff's loss in excess of the coverage provided by the written policy.
The trial court denied the motion and the case went to the jury. In a special
verdict, the jury found that the oral binder differed from the written policy
issued by defendant in that it eliminated (1) the requirement of direct
physical loss; (2) the exclusion for damage by mold; (3) the exclusion for
damage by water that backs up through drains; (4) the exclusion for damage by
water other than water that backs up through drains; and (5) the exclusion for
damage by faulty work. The jury found that defendant had breached the oral
binder and that plaintiff had suffered damages of $268,417.

On appeal, defendant raises multiple
assignments of error. The first four relate to the standard of proof described
in the jury instructions and assert that the trial court erred in instructing
the jury that plaintiff was required to establish the terms of the oral binder
by a preponderance of the evidence rather than by clear and convincing
evidence. Defendant's fifth assignment challenges the trial court's denial of
its motion for a directed verdict on the allegation that Pittman orally bound
coverage different from the policy that defendant issued. Defendant's sixth
and seventh assignments concern whether the failure to deliver the written
policy is a breach of the agreement and, if so, whether there is evidence to
support plaintiff's claim of damages. Its eighth assignment challenges the
award of attorney fees. Because we agree with the arguments in defendant's
fifth and sixth assignments of error that the claim should not have gone to the
jury at all, we reverse the judgment on that ground and do not reach the other
assignments of error on appeal or plaintiff's assignment on cross-appeal
seeking expert witness fees and expenses.

As previously noted, this case
involves an action for breach of an oral contract of insurance--an oral
binder. A "binder" is a contract for temporary insurance, effective
until permanent insurance is approved or disapproved. United Pac. Ins. v.
Truck Ins. Exch., 273 Or 283, 289-90, 541 P2d 448 (1975); see also
Black's Law Dictionary 190 (9th ed 2009) (defining "binder" as
"[a]n insurer's memorandum giving the insured temporary coverage while the
application for an insurance policy is being processed or while the formal
policy is being prepared"). To be enforceable, a binder need not contain
all the necessary elements of an insurance contract, so long as the protection
for which the parties contracted can be determined. United Pac. Ins.,
273 Or at 290.The binder need not express any consideration or state
the premium, because the agreement, express or implied, to pay the regular
insurance premium is sufficient consideration. Id.

In Oregon, an oral binder for
insurance is enforceable under ORS 742.043(1), which provides:

"Binders or other contracts for temporary
insurance may be made orally or in writing, and shall be deemed to include all
the usual terms of the policy as to which the binder was given together with
such applicable indorsements as are designated in the binder, except as
superseded by the clear and express terms of the binder."

As reflected in the statute, there is a presumption that a
binder includes those terms that are usually contained in the policy for which
the binder was issued. Bank of California v. Livingston, 65 Or App 743,
746 n 2, 672 P2d 386 (1983); see also Cleveland Oil Co. v. Norwich Ins.
Society, 34 Or 228, 236, 55 P 435 (1898). It is undisputed on appeal that
the "usual terms" of "course of construction" coverage
either exclude or do not provide coverage for the risks that resulted in
plaintiff's loss. On appeal, defendant contends that the trial court erred in
submitting plaintiff's claim to the jury, because there was no evidence from
which the jury could find that Pittman orally bound coverage different from the
"usual" course of construction coverage. In the alternative,
defendant contends that the coverage for faulty work that plaintiff claims
Pittman bound is in the nature of a performance bond that only the builder
could have provided and is not available through insurance; accordingly,
defendant asserts, there are no "usual terms" for such a policy.
Because we agree with defendant's first argument, we do not reach the second
one.

In reviewing the trial court's ruling
denying defendant's motion for a directed verdict, the question is whether
there is any evidence in the record to support the jury's verdict. Brown,
297 Or at 705. We will not set aside the verdict unless we can affirmatively
say that there is no evidence from which the jury could find that the usual
terms and exclusions of a course of construction policy were superseded by the
"clear and express terms of the binder," so as to provide coverage
for plaintiff's loss.

We pause for a moment to consider
what is meant by "clear and express." The term "clear" is
defined in Webster's Third New Int'l Dictionary 419 (unabridged ed 2002)
as "easily understood : without obscurity or ambiguity * * * easy
to perceive or determine with certainty." Black's defines the term
"clear" as "free from doubt; sure * * * [u]nambiguous." Black's
at 287. The term "express" is defined in Webster's as
"directly and distinctly stated or expressed rather than implied or left
to inference : not dubious or ambiguous : DEFINITE, CLEAR,
EXPLICIT, UNMISTAKEABLE." Webster's at 803. Black's
defines the term "express" as "clearly and unmistakably
communicated; directly stated." Black's at 661. Thus, a plaintiff
who seeks to establish under ORS 742.043(1) that "clear and express"
terms of an oral binder supersede the usual terms of the policy meets that
burden by showing binder terms that are definite, explicit, and unambiguous.

Plaintiff contends that there is
evidence from which the jury could find, as it did in its special verdict, that
Pittman bound coverage by clear and express terms that (1) eliminated the
requirement of direct physical loss; (2) eliminated the exclusion for damage by
mold; (3) eliminated the exclusion for damage by water that backs up through
drains; (4) eliminated the exclusion for damage by water other than water that
backs up through drains; and (5) eliminated the exclusion for damage by faulty
workmanship. Plaintiff contends, in essence, that there is evidence from which
the jury could find terms that were "clear and express" insuring
plaintiff against losses that are excluded from the usual course of
construction coverage and, further, that are not generally insured.

We have reviewed the record carefully
and have read all of the testimony. Viewing it in the light most favorable to
plaintiff, we nevertheless conclude that there is no evidence that the parties
agreed to or that Pittman bound terms that clearly and expressly waived or
superseded the usual terms or exclusions of course of construction coverage.
Assuming, as we must, that, in their conversations about different types of
insurance, Pittman agreed to provide plaintiff with a "safety net" of
coverage "in all instances that something goes wrong" and that he
even agreed that defendant could provide some type of coverage in the event of
"faulty work," that evidence is simply too vague and obscure to
satisfy the requirement of ORS 742.043(1) for the terms that are "clear
and express"--i.e., that definitely, explicitly, and unambiguously
superseded the terms of the course of construction coverage. As noted,
defendant's course of construction coverage provided both liability and
property coverage. In their two face-to-face conversations, Pittman and
plaintiff discussed both liability and property coverage; plaintiff's testimony
relating those conversations and the types of losses for which he sought
insurance did not distinguish between liability and property coverage. In
short, the testimony is ambiguous and does not provide evidence of terms that
clearly and expressly modified or waived the terms of the "usual"
course of construction policy or its exclusions from property coverage for
faulty work, water damage, and mold.

Plaintiff contends that, because
Pittman never explained the policy's exclusions to him, he had no reason to
believe that any risks were excluded and that the jury accordingly could infer
that all risks were bound. The difficulty with plaintiff's reasoning is that
ORS 742.043(1) imposes a presumption that the usual terms of a course of
construction policy apply, including the usual exclusions; it is plaintiff's
burden to show that those usual exclusions have been explicitly superseded.
The statute requires more than evidence from which an inference can be drawn;
it requires evidence of terms that are "clear and express." Any
inference that arguably could be drawn from Pittman's failure to describe the
exclusions from coverage does not satisfy the statute's requirement for terms
that clearly and expressly supersede them. See Webster's at 803
(defining "express" as "directly and distinctly stated or
expressed rather than implied or left to inference"). Thus, we conclude
that the trial court erred in submitting to the jury the allegation that
Pittman orally bound coverage different from the policy that defendant issued.

Finally, defendant contends in its
sixth assignment of error that the trial court erred in allowing the jury to
consider plaintiff's allegation that a failure to timely deliver or mail a copy
of the policy to plaintiff constituted a breach of the implied covenant of good
faith and fair dealing. The jury found that defendant breached the contract by
failing to mail a copy to plaintiff and that the failure to deliver the policy
to plaintiff within a reasonable time was a cause of plaintiff's damages.
Defendant asserts that the trial court committed legal error in allowing the
jury to consider the allegation of breach of the implied covenant of good faith
and fair dealing, because the delivery or mailing of the policy is not a term
of the contract and therefore cannot be a basis of a claim for breach of
contract. Defendant further contends that, assuming that a failure to deliver a
policy can form the basis for a breach of contract claim, plaintiff failed to
submit any evidence that he was damaged because of a failure on defendant's
part to timely deliver the policy. Because we agree with defendant's second
contention, we do not address whether the failure to deliver the policy could
constitute a breach of the implied covenant of good faith and fair dealing.

In a breach of contract claim, a
plaintiff may recover damages that are caused by the breach and that are
foreseeable and not speculative. Wilcher v. AmeriTitle, Inc., 212 Or
App 498, 506, 157 P3d 790, rev den, 343 Or 366 (2007); see also
Dynagraphics, Inc. v. U.S. National Bank of Oregon, 100 Or App 108, 112-13,
785 P2d 760 (1990) (damages must be caused in fact by breach and must be
foreseeable, that is, either arise naturally from the breach or have been
within the contemplation of the parties at the time they made the contract); Bixler
v. First National Bank, 49 Or App 195, 202, 619 P2d 895 (1980)
("[D]amages must be established by evidence upon which their existence and
amount may be determined with reasonable certainty.").

In order to establish his damages,
plaintiff was required to present evidence from which it could be found that
defendant's failure to deliver the policy in a timely manner was the cause of
his damages. Plaintiff contended that, had he received the policy within a
reasonable time after its issuance,(3) he would have read it and
discovered that it did not cover losses due to mold or faulty construction and
would have obtained that protection elsewhere. Plaintiff offered no evidence,
however, from which the jury could find that such coverage would, in fact, have
been available to plaintiff in December 2003, after construction was already
underway. Underdown, plaintiff's expert, testified that he was aware of one
insurance company that, in the fall of 2003, offered a product that covered
loss due to mold. However, Underdown did not testify that, in December 2003,
after construction of the home had begun, plaintiff could have obtained a
policy covering loss for mold. As for faulty construction, defendant's expert,
Wilson, testified that an owner is ordinarily entitled to request that a
contractor provide a performance bond that is bigger than the performance bond
required by Oregon law.(4) However, there was no
evidence that, in December 2003, after the commencement of construction, plaintiff
could have obtained a performance bond that would have covered his loss. Thus,
we conclude that there was no evidence from which the jury could find that, had
defendant timely delivered the policy after its issuance, plaintiff could have
obtained the coverage that he sought.

In light of our conclusion that there
is no evidence from which the jury could find that defendant's agent bound
terms that clearly and expressly superseded the usual terms of a course of
construction policy or that plaintiff was damaged as a result of defendant's
failure to timely deliver the policy, we conclude that the trial court erred in
submitting plaintiff's claims to the jury. We therefore reverse the judgment
for plaintiff and do not address the remaining assignments of error on
defendant's appeal and plaintiff's cross-appeal.

Reversed on appeal; cross-appeal
dismissed as moot.

1.Plaintiff also
asserted a claim against Pittman, which was dismissed on summary judgment.
Pittman is not a party to this appeal. References in this opinion to
"defendant" are to Country Mutual Insurance Company.

2.During the
trial, the parties and witnesses used the terms "course of
construction" and "builder's risk" interchangeably, and, on
appeal, the parties agree that the terms are synonymous and refer to coverage
for a building during construction.

3.We note that,
under ORS 742.043(2), defendant had 90 days from the date of the oral binder,
or until November 30, toissue a policy. ORS 742.046 requires that a
policy be mailed or delivered to the insured "within a reasonable period
of time after its issuance."